On May 10,a business collected $2,200 on account.What journal entry is needed on May 10?
A)Debit Accounts Payable for $2,200 and credit Accounts Receivable for $2,200.
B)Debit Accounts Receivable for $2,200 and credit Revenue for $2,200.
C)Debit Cash for $2,200 and credit Accounts Receivable for $2,200.
D)Debit Accounts Payable for $2,200 and credit Revenue for $2,200.

Question

Quizplus · Accepted Answer

The business collected money on account, which means they received cash for a previously recorded Accounts Receivable. Therefore, we need to debit Cash and credit Accounts Receivable. Option C is the only option with these debits and credits. Option A is incorrect because it records a payment made to a creditor instead of a collection made from a debtor. Option B is incorrect because it records revenue, which was already recorded at the time of sale. Option D is incorrect because it records a payment made to a creditor instead of a collection made from a debtor.

On May 10,a Business Collected $2,200 on Account